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Consumer Confidence Drops Even Lower — But Is The Recession Really To Blame?

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Well, after a quick, hi-energy burst of enthusiasm in the spring, we're back in the doldrums. The consumer confidence index is down to 49.3, below its May level of 54.8. (A level of 90 would indicate a "solid" economy.) And June sales figures due out next week are expected to show a fairly dismal 6% decline since May.

Stores are already trying to cut their losses — offering huge discounts on summer clothing and home and garden supplies far earlier in the season than normal, and selling off surplus stock to discount stores and liquidators.

But don't blame faltering job security, tumbling stock values, and increasing gas prices — it's the rain! Who needs a bikini or a barbecue when we're all inside making beef and lentil stew and wearing sweaters?!

Consumer confidence falls in June [USA Today]

(Photo: Bethany L King)

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Honestly, I think there's something to be said for the weather having an effect on spending patterns, at least in the northeast.

It hasn't been quite as wretched in DC as it has been for my family back home in Boston (and all of my friends in NYC), but the fact that our electric bills have come in for the last three months with about 60% of the usage of the same three months in 2008 should say how much cold and rain we've had. I've not been thinking about summer clothes until just this past two weeks; we've mostly been sitting inside and not going into Summer mode.

Maybe I should be, though. Sounds like I could hit some killer clearance deals.

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You should come to Arizona. It's 99 degrees outside and pouring down rain.

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It's warm here in Souther California yet my local target has already put all their garden furniture on clearance.


I think its more of people seeing that the stuff thats out there is either crap, or just more of the same crap they already have. I'm making things last longer personally. My couch is wearing out, but it still works. I have been cooking at home more as well.

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I've found that at least in the clothing stores, there's nothing worth buying. And in summer its alot easier to buy an $8 tank top at Old Navy than it is to start buying hundreds of dollars worth of ugly clothes that the department stores are pushing. Plus, its not like the prices have gone down much and they have the same merchandise sitting there since March that nobody wanted then.

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No, I think it's still the economy. I've been discharged from the military for almost a year and I've been on unemployment nearly the entire duration, even though I have a degree and work experience in my field. I also happen to live in Ohio, where the job market is absolutely pathetic. And no, I'm not one of those people milking unemployment, but I'm not going to go off it and work at Old Navy for $6.25 an hour (actual offer I received).

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@1stMarDiv: What's your field? What's your degree? Are you willing to move out of Ohio?

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I have a few typical spring & summer purchases I have been trying to make for months. I was in Target today and patio chair cushions were still full price as was everything else in the seasonal section. Now add to this that I went out looking for patio cushions that were not totally ugly in April and found nothing that would work. I was willing to settle for something half ugly if it was on sale, no dice. The same scenario for summer clothing. Even when I want to buy something I can't find anything that isn't butt ugly and I am not seeing any sales. Maybe it is time the retailers start taking the blame for their own failings.

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you should come to North Carolina. it's been in the low 90s for the past 2 weeks, high humidity, little (if any) rain, and little to no cloud cover.

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I recently moved from Washington to Rhode Island, its my fault.

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@HiPwr:


My field's Public/Media Relations, along with journalism. The degree is in Communications/Journalism and I'm looking to move pretty much anywhere there's work. I've actually considered doing a contracting gig in Iraq for a year because it pays 6 figures and there's no long-term commitment.

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@bohemian: The summer clothes really are ugly. Everything looks like a tent when its tried on. Some things are just too ugly to even try on. I am not sure when clothing designers decided that all women must dress in long babydoll shirts that look like tents.

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People are choosing to buy less unessential and ugly stuff. Sounds like good judgement vs. a decline in confidence.

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@1stMarDiv: I'm guessing you didn't accept it right away cause you could get blowd up

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You've got to blame in on something... blame it on the rain.

This would work better if I had long, flowing blonde hair.

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@Sheogorath: Every time I'm in Arizona it's 110+ and the air smells like burnt flint. Never seen a drop of rain east of the pass...

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@B: Errr... wait that's a Milli Vanilli song,

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@gStein: That all came after about two weeks of straight rain.

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Living near Amarillo, I just heard on the radio that county tax revenues are down (imagine that), but Amarillo has been relatively unaffected to what's happening to the rest of the country. Local finance people state the problem is that the economy has people scared and more people are stashing away bucks while awiting Barry O's salvation plan.

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@Etoiles: I guess that global warming is a bitch, oh wait, now its cold and rainy in the summer that is the problem. That is why now we must call it "climate change", not global warming.

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@Etoiles: F you, you F'n F. We just hit a 100 Sunday with 92% humidity. Florida sucks in the summer.

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Why are we worried about consumer confidence?

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@angelcake88: I agree when it comes to clothing and most consumer goods. There's nothing desirable out there. Nothing eye catching. It's all very bland and dated looking. I don't see many "classic" peices out in the stores. A lot of stuff that's "In" for five minutes and out the next, but nothing quality, long lasting, and beautiful.

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@ospreyguy: I could never stand humidity, but I'd take that heat over our 55 degrees and everyday rain in Boston. As long as it was also sunny.

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@Outrun1986: Hahaha, I had a friend who nicknamed those "tit curtains."

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@Newman!!!!: I think what happened is the powers that be made a whole bunch of noise about gains in April and May and started talking about how the recession is ending and folks bought into the hype and thus confidence went up.

Now they are realizing reality is a little less rosy.

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@Japheaux: By bucks I am assuming you mean gold and by salvation plan I am assuming you mean 2012 election defeat.

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My confidence has been low because of so much resistance to change that is going on by the minorities in Congress.

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@angelcake88: Yeah, it seems like all the new clothing being released is boring. I'd be willing to shop if they had something I wanted.

My favorite restaurants aren't really doing much either in terms of a summer menu.

Maybe it is a chicken and egg type thing. They don't want to release anything good since it won't sell as well as it would in a good economy but we won't buy anything unless the item is good?

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Its hard to feel confident when I see gas and grocery bills still going up (and my electricity bill will be going up soon too for the summer), yet my husband is still 7 months without a raise and word at my office for the upcoming raise/bonus time is not to expect anything either. School tuition for next fall will be higher and somehow we have to figure out a way to pay for all the increases without any extra income on our end. I'd love to buy a few new clothes for the summer, but hardly anything is on sale and we have no extra money.

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Too many people are reading the consumerist. You guys are doing too good of a job. :P

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@StanislausBabalistic: Then you would live in socal. I hate them to.

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Maybe the consumer confidence numbers are notso-hotso because people in general are waking up to the fact that we have been on a debt bender for the last several years and the fun's over and now its time to pay up.The rising savings rate would seem to indicate that people are finally starting to resist the idea that they owe themselves lots of stuff that they can't afford. Does it seem stupid to anyone else that we can put ourselves in debt for years for a lot of cheap crap from Target , Walmart etc. that will last just a few months ? (Or that will pass out of style in a few hours ?). If it takes a deep , painful recession to wake people up that they are being made wage slaves to usurious lenders , well , I think that is a price we need to pay.

Pain ? Yeah ,plenty of it. But just like a generation raised during the depression were wary of Wall Street and big banks , maybe this generation will realize that debt is dumb and react accordingly.

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@JamieSueAustin:

I so agree about clothing this spring. I wear classic styles mostly, and my old standby Liz Claiborne hired Isaac Mizrahi, and now their line is all weird colors and tops/dresses that look like maternity clothes -- great maybe on a size 2 teen, but that is SO not Liz's market! So, I don't even bother shopping in their online store or at the nearest LC outlet anymore. Trash! Where can I get nice classic long cardigans in summer weight knits? Twin sets that don't have lace or gathered sleeves? etc. Fuggedaboudit.

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@1stMarDiv:

In our tiny state, unemployment is over 12% now. Tons of homes are in foreclosure, renters are being evicted because the landlords default, and the state budget is in such bad shape, they even cut the longstanding public bus service from the city to the beaches this summer.

So, I don't think a lot of buying is going on here other than necessities.

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@Outrun1986:

THIS x 1,000! The babydoll/maternity styles should just DIAF. Hello: babyboomers are a HUGE market; why are you ignoring us?

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@StanislausBabalistic:

ROFL Funny and sadly true.

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@Jevia:

I hear you. My husband just went back to work after two years without a job. At my workplace, we are in our 2nd year with NO raises at all, and a big chunk of jobs were just eliminated, with twice as many predicted for next spring. College tuition, gas prices.... thank God it's been cool here in New England and we haven't needed the AC's so far. 8-/

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@Snarkysnake:

I think you're onto something here, "Snake." Many of us are feeling disgusted with TOO MUCH STUFF. Paring down to the essentials feels good, the same way a diet feels after the first agonizing weeks.

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@Skaperen: LOL! Hope and Change. They've made the changes, now there's very little hope.

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@ElizabethD: B. Moss. Except they went out of business last winter in the recession. It was the only store credit card I owned and I'm STILL sad!

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@ElizabethD: I didn't wear those styles even pregnant ... because they make you look way pregnanter! Something with a little bust definition in maternity is much more flattering and makes you look less like a cruise ship!

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@gStein: Yes, but the tree sex. OH, THE TREE SEX, all over your car making it turn green, making my nose run like a watermain, creeping in your tightly-sealed windows to cover every surface in your house ....

I see your Duke logo there, YOU KNOW WHAT I'M TALKING ABOUT.

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I will try to look on the bright side and hope I can find a summer dress on sale for the upcoming baptism. But I don't have a lot of hope.

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@Etoiles: Yeah, the rain has sucked in DC, but OTOH it's nice that my electric bill will still only be $30 because I haven't had to run the A/c

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@Japheaux: People are stashing money because of the uncertainty of what our government will do next to kill off the private sector. They've taken over banks, insurance companies, and auto companies. Obama has even fired a Rick Wagoner/GM and two Inspector Generals (Gerald Waplin/AmeriCorps, Fred Weiderhold/Amtrack). And now they're going to raise taxes on everyone in the US!

My Hope lies with Change that will arrive in 2010 and 2012. (Assuming Barry doesn't appoint himself dictator for life)

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@Eyebrows McGee (now with more baby!): Damn those slutty trees, they're the reason my car will go from silver to yellow overnight.

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@theblackdog: First year I was there, I didn't know enough to know to wait for someone ELSE to wash their car first. I figured it was a one-day deal and went to wash my very dirty car!

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@Eyebrows McGee (now with more baby!): It is true, they make you look worse, and they have the ability to make even a thin person look fat. My mom wears a size 10 and she tried on some of those shirts in an attempt to replace worn out summer shirts, there was nothing that looked even remotely acceptable. So yeah, they need some normal clothes out there. How do I put this... dressing to make yourself look bigger than you really are is... bad.

Any of the plain basic shirts are just so cheaply made and see through that wearing one of these would also be a crime towards fashion for a woman who is my mother's age. It doesn't matter what store you go to or what price you pay its all cheap crap that is thinner than paper. This stuff might be OK for the kid who is growing or the teenager but definitely not for a real adult. Explains why there are huge piles of summer clothes left, nothing is selling because its all butt ugly.

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We're in a good, stable financial position right now -- layoffs came and went, husband survived, there'll be an itty-bitty raise come September -- but it's not easy to be confident when you live in a state where industries are collapsing left and right and it seems like everybody you meet is out of work. I'm content to hunker down and wait this out.